Digital Financial Alchemy
Hart Lambur, the co-founder of UMA, in this video, described financial derivatives as a form of alchemy. A synthetic asset that represents the value of another underlying asset. These are toys that large financial institutions get to play with and it is estimated the derivatives market is worth $1Q (that's Q for QUINTILLION!)
If, like me, you are not a large institutional investor or a member of one of these exclusive groups your access to these markets is, sadly, non-existent. Sorry about that, name not down, not coming in. If you press your ear close enough to the window you may be able to hear the *clink* of priceless crystal champagne flutes from the opulence inside emanating from the party you are definitely NOT INVITED TO from outside, in the cold, if you are lucky.
Wait, that's like, totally unfair
Allison Lu & Hart Lambur agree with you. Between them they founded UMA, which stands for Universal Market Access that was created to address the above inequality.
UMA is built on the Ethereum blockchain and functions in two ways. Creating and utilising financial contract assets in the form of synthetic tokens and providing a decentralised oracle service for enforcing and managing these contracts.
In short, thanks to the world of magic internet money that is ever emerging, expanding and we are now an irreversible part of that once exclusive closed party with the burly security is now available to anyone with an internet connection and a browser extension.
Secret handshakes and prestige golf club memberships are no longer a requirement for entry.
Permission less. This is a term that cryptocurrency users may be familiar with. The ability to use something without being told you can't or prevented from doing so. Why should barriers exist based on geography? Now that the decentralised nature of the Ethereum blockchain has enabled a protocol such as UMA to function the barrier into the derivatives markets need not apply.
That sounds Ultra, Mega and Awesome! How can I get involved?
If the above resonates and have a desire to jump in and see what is possible with UMA I have some great news. The communities that exist of users and developers is, speaking from my recent experiences, welcoming, inclusive and maybe above all friendly and fun.
Here are a few ways to learn more and connect;
There is a lot of active discussion on the UMA discourse forum and it is encouraged, if unsure of something, to ask and something I appreciated was the -there-are-no-stupid-questions- channel on the discord server.
1Q% APY
Many of the users of Publish0x, I would suggest, with myself included, are here to learn ways to make more money, to make better use of any capital outside of the traditional financial systems and to eventually buy a set of crystal champagne flutes.
Being built on Ethereum, the smart contracts using the UMA protocol can be interacted with in the same way other decentralised apps such as you would with Uniswap for instance and offer earning potential from a variety of UMA specific decentralised apps.
Here's a list with links to some of the dapps using UMA;
- perlinx.finance - Synthetic Asset Exchange
- degenerative.finance - Synthetic Asset Exchange
- mario.cash - Digitally Native Token
- (Rewards from minting and adding liquidity to a balancer pool. Visit greatly enhanced by the music!)
- umabills.com - Earn Rewards by Minting UMABILLS Yield Dollars
Minty fresh
Lets take a look at the UMABILLS decentralised app with a brief overview how to get started earning on your capital.
The process to earn rewards is as follows:
- Provide collateral in the form of Wrapped Ethereum or renBTC
- Receive freshly minted yield dollars
- Add these yield dollars with the equivalent USDC to a Balancer pool
UMABILLS interacts with an installed Ethereum browser extension wallet such as Metamask or the built in crypto wallet in the Brave browser. There are loads of setup guides for Metamask such as this one.
To get started after landing on the UMABILLS homepage first off unlock your wallet and for an example of the interface lets head over to the page to mint yield dollars with wETH (wrapped Ethereum) with June 2021 contract expiry.
Links highlighted in red.
The rewards page at the time of writing this was at around 69% and is paid out in UMA. To check the current reward % APY head over to the Rewards page from the link in the bottom left hand side of the screen.
From this page everything you need to start earning rewards on your collateral is in one place. From here you can mint yield dollars by providing collateral in this instance in wETH to receive UMA yield dollars.
After inputting the amount of UMABILLS yield dollars you would like to mint the the amount of collateral required, in this instance wrapped Ethereum, will auto populate. There is a handy Ethereum to wETH converter to easily wrap your Ethereum to provide for collateral for minting the UMABILLS yield dollars.
Once the transaction has been approved and the UMABILLS yield dollars have been minted the other utilities on that same page allow you to manage your position, withdraw collateral and redeem your collateral upon expiry. To be eligible for the UMA token rewards the last thing to do is add your UMABILLS yield dollar tokens and equivalent USDC to the balancer pool. This can be done by using the handy utility at the bottom of the page which will populate once you have some minted UMABILLS yield dollars in your Metamask wallet.
The above is a brief overview of the UMABILLS interface and only some of the features of the dapp. It is encouraged for further information to join the UMA discord server that has a dedicated UMABILLS channel.
A decentralised financial future, now. Open the sauce!
There are many more exciting things going on in the UMA ecosystem and is ever developing and expanding to enable more users to utilise some of the same financial opportunities in a permission less, decentralised manner that have been previously unavailable in any part of history.
What a time to be alive *Clink*
